On  March 31, EU ministers met to discuss the global shortage of around 11million barrels of oil per day. At the meeting, European Commissioner Dan Jørgensen urged nations to outline measures to reduce the use of oil and gas, particularly in transportation. The effective closure of the Strait of Hormuz has caused panic within Europe. As a result, the EU has been advised to consider biofuels as an alternative to fossil fuels.

Unlike America, Europe is struggling to find sources of oil that are either not in Russia nor the Middle East. As a result the European Union has been advised to look again at Biofuels.

The EU’s Renewable Energy Directive requires member states to achieve a 29% share of renewable energy in transport by 2030, including a sub-target for renewable hydrogen and advanced biofuels of 5.5%.

Source: MSN: Read The Article

PSR Analysis: The real question is can biofuels actually replace fossil fuels? While it is possible to grow high energy crops on some poor-quality land, it is generally viewed that biofuels are a niche option at best.    PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

China has also committed to installing 10,000 photovoltaic systems for isolated homes and critical facilities. China is also investing in Cuba’s wind farms.

Source: Clean Technica Read The Article

PSR Analysis: What makes this article interesting is one factor –President Trump has blocked Cuba’s access to cheap Venezuelan oil, and he has forced them to consider alternative sources of power. This comes just at the time when the US has attacked Iran and Iran has forced oil prices to grow dramatically. It turns out that while President Trump has pulled the USA back from renewables, he may just have given renewable and EVs the biggest growth boost it has ever had.   PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

Refining battery metals in the US and Europe has been difficult to scale up because the more traditional refineries often require billions of dollars in upfront investment, take a long time to get all the necessary permits and require huge amounts of material in order to be profitable.

Nth Cycle says that its process is different and can be operated without the constraints of traditional refineries and is profitable at much smaller scales.

Source: Electrek: Read The Article

PSR Analysis: The world of battery recycling is developing at a fast rate but the real significance of this is the scale – despite being profitable at smaller scales, this deal is for thousands of tons of material.   PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

There seems to be a never ending cycle of oil-related problems. In 2008, supply, demand and speculation caused a massive price hike. In 2022, Russia invaded Ukraine causing another oil price hike. And now, the US-Israeli attack on Iran has driven yet another price hike. The fundamental problem is that transportation remains totally dependent on oil, and oil prices are set by a very volatile global market.

This whole problem has encouraged motorists to do the math, and the result is staggering. Motorists simply cannot afford not to buy an EV as their next vehicle. This article goes into the math behind this.

Source: Electrek: Read The Article

PSR Analysis: EVs cut across this problem, and it doesn’t impact them because electric prices are set nationally not by a very volatile global market and they are a fraction of gas prices. Electric prices are also a way out of oil dependence.      PSR

Guy Youngs is Forecast & Adoption Lead at Power Systems Research

Global medium and heavy truck production is expected to increase in most important regions this year, but China’s MH truck segment probably will see a major structural change. Overall production in South America is expected to be flat, although Argentina is likely to post a gain of almost 10%.

North America. Medium and heavy truck production in North America is expected to increase by 9.4% this year compared with low 2025 production. While class 8 truck production is expected to increase by 11.3% this year as order rates for class 8 trucks improved strongly from December – March. 

Improvement in freight rates and freight demand along with tightening truck capacity and some level of truck pre-buy ahead of the 2027 GHG emission regulations is expected to drive increased truck production this year.  However, a protracted conflict in the Middle East would put significant downside pressure on truck demand primarily due to higher fuel cost, supply chain disruptions and an overall concern about the state of the economy moving forward throughout the year.

Europe. Medium and heavy truck production in Europe is expected to increase by 6% this year compared to 2025.  After very low truck demand during the past few years, it does appear that demand may have bottomed out and has started to improve this year.  Truck demand in Western Europe is expected to improve this year as the fleets will need to replace their older trucks purchased in 2022 and 2023. 

With regard to the conflict in the Middle East, if this conflict is relatively short lived (a month or two), it will probably have minimal impact on the European and global economy.  However, if this conflict were to drag on and oil tankers could not pass through the Strait of Hormuz, this would impact Europe with higher energy prices and supply chain disruptions.  Just the thought of an economic slowdown would likely give the fleets pause on capital investment.

South Asia. After a strong level of vehicle replacement during the past few years, commercial vehicle production is expected to increase by 3.1% this year compared with 2025.  In India, truck and freight capacity has mostly rebalanced and MHCV production is expected to increase by 3% this year compared with 2025.  Demand is expected to grow in the mid-term owing to a strong macroeconomic environment, healthy fleet utilization levels, Government capex on infrastructure projects, and stable freight demand. 

South America. Medium and heavy commercial vehicle production is expected to be flat this year compared with 2025.  Production in Argentina is expected to increase by 9.6% as the economy is improving and inflation is down significantly from a year ago.  MHCV production in Brazil is expected to be flat this year while vehicle production in Columbia is forecasted to increase by 5% this year.

Japan/Korea. Medium and heavy commercial vehicle production in Japan and South Korea is expected to increase by 2.1% in 2026 over last year.  Commercial vehicle production is expected to increase by 2.1% in Japan and increase by 2.6% in South Korea this year. 

In Japan, infrastructure spending and the continued need for the fleets to replace older trucks will be the primary reasons for increased truck demand this year.  For both Japan and South Korea, the trade tariff uncertainty will place pressure on the OEMs in their various export markets throughout the year.

Greater China. In 2026, China’s heavy-duty truck industry total sales are expected to remain in a high range of 1.1 million to 1.16 million units, showing a trend of “slight total growth but drastic structural change.” Domestic sales, supported by the concentrated replacement of China V emission standard models and the continuation of the “trade-in” policy, are projected to be approximately 700,000 to 790,000 units, while the export market will become a key growth pole, contributing an estimated 300,000 to 340,000 units.   PSR

Chris Fisher is Senior Commercial Vehicle Analyst at Power Systems Research

Volvo Construction Equipment has officially transitioned the A30 Electric and A40 Electric articulated haulers into serial production at its Braås site in Sweden. Originally unveiled as prototypes at bauma 2025, these machines represent the largest electric articulated haulers currently available on the global market, boasting payloads of 29 and 39 tons, respectively.

Designed for high-utilization environments like large-scale infrastructure projects and mining, the haulers offer up to six hours of operation on a single charge, depending on the application. The first production units are scheduled for delivery to customers in the United Kingdom and Norway this month.

This move solidifies Volvo’s commitment to lead the heavy-duty transition, moving beyond compact machines into the most energy-intensive segments of the construction industry.

Source: Volvo  Read The Article

PSR Analysis. The serial production of 40-ton electric haulers is a “proof of concept” for the entire European construction sector. For years, the industry argued that electrification was only viable for small excavators or urban projects; Volvo has now shattered that ceiling.

For competitors like Komatsu and Caterpillar, the pressure is now on to move their European fleets toward serial production rather than limited pilot programs. For fleet operators, the “total cost of ownership” (TCO) equation is shifting; while the upfront cost remains high, the reduction in fuel costs and maintenance for such high-utilization machines makes them increasingly attractive.

This is particularly relevant given the Industrial Accelerator Act’s focus on green procurement, as public infrastructure projects in Scandinavia and the UK are now likely to mandate zero-emission machinery of this scale.   PSR

Emiliano Marzoli is Manager of European Operations at Power Systems Research

Simultaneously, KTM’s corporate structure shifted as Stephan Reiff (formerly of BMW Motorrad) officially assumed the role of Chief Commercial Officer on April 1. On the community front, KTM confirmed that the 2026 KTM Europe Adventure Rally in Gubbio, Italy, has reached near-capacity registrations.

These developments signal a move away from the “overproduction” issues of 2025 toward a leaner, premium-focused strategy centered on Austrian-made electric innovation and high-margin “Orange Family” events.

Sources: Bajaj, AutoEvolution, KTM   Read The Article, Read The Article, Read The Article

PSR Analysis.  The stabilization of KTM through Bajaj’s $642.72$ million USD (€550 million) refinancing and the Mattighofen hub expansion is a critical “rescue story” for the European motorcycle industry. By localizing the production of high-performance electric components like the Freeride E’s drivetrain in Austria, KTM is positioning itself to benefit from the EU Industrial Accelerator Act’s “Made in EU” incentives.

For the broader industry, KTM’s aggressive pivot to a “premium-core” strategy—divesting from bicycles and non-core sports cars—highlights a trend of consolidation among European motorcycle manufacturers facing pressure from Asian imports.

The successful registration of the Adventure Rally also underscores the rising importance of “experiential retail”; for players like BMW and Triumph, the message is clear: survival in the 2026 market depends as much on building a gated community of riders as it does on the technical specs of the bikes.

The integration of Indian financial capital with Austrian engineering creates a formidable competitor. KTM now possesses the scale of Bajaj Auto for global sourcing and the high-end R&D capability of Mattighofen for the European premium market. This “hybrid” model allows KTM to weather economic volatility better than it did as a standalone entity in 2024.

As the Freeride E hits dealerships this month, it serves as a laboratory for the next generation of electric street bikes. If KTM can successfully migrate this technology to a “Duke E” or “SMC E” platform by 2027, it will likely dominate the urban European motorcycle segment, particularly as cities tighten noise and emission regulations. For your newsletter, the key takeaway is that KTM has successfully “right-sized” and is now the leading European edge for electric off-road technology.  PSR

Emiliano Marzoli is Manager of European Operations at Power Systems Research

The Brazilian federal government reversed the decision to resume the application of taxes affecting school buses acquired under the Caminho da Escola program, administered by the Fundo Nacional de Desenvolvimento da Educação (FNDE). The discussion involved the potential reintroduction of tax charges impacting the cost structure of buses supplied through the public procurement framework, particularly related to federal and state taxation such as IPI and ICMS, as well as uncertainty regarding the treatment of PIS/Cofins.

The clarification of tax exemption conditions allowed the release of a new tender round that had been temporarily delayed due to pricing uncertainty. The Caminho da Escola program represents an important institutional demand channel for domestic bus manufacturers and body builders, particularly for configurations adapted to rural transport conditions. The expected procurement volumes support the renewal of school transportation fleets and help maintain baseline demand levels in a segment that has been affected by constrained financing conditions and slower private sector investment dynamics.

Source: AutoData     Read The Article

PSR Analysis: he release of a new tender round under the Caminho da Escola program reinforces the relevance of institutional procurement as a stabilizing demand mechanism for the Brazilian bus industry. In a context of weaker early-year market performance and still restrictive financing conditions, the program contributes to mitigating cyclical volatility by sustaining baseline production volumes. However, the timing of contract awards and production ramp-up suggests that a significant portion of the impact should materialize in 2027 rather than fully in 2026. From an industry perspective, the program improves short-term visibility for OEMs and bodybuilders while partially offsetting the slowdown in private fleet renewal, although its structural impact remains limited by fiscal constraints and dependence on public budget allocation cycles. PSR

Fabio Ferraresi is Director, Business Development, South America, at Power Systems Research

The investment reflects a strategy to expand the company’s manufacturing footprint in regions with strong demand for agricultural mechanization, particularly in medium-horsepower tractor categories.

Localization is expected to support supply chain development and facilitate access to financing mechanisms tied to local production requirements.

Source: Click Petróleo e Gás     Read The Article

PSR Analysis. The Indian manufacturer is positioning itself to compete in Brazil’s large and structurally important agricultural machinery market, recognizing that local production is a key requirement for competitiveness. Domestic manufacturing improves cost structure, enables access to subsidized financing programs linked to local content, and strengthens brand perception as a committed local player rather than an importer. Beyond pricing advantages, the strategy supports dealer network expansion and increases credibility among farmers, a critical factor in a market characterized by strong brand loyalty and long equipment replacement cycles. PSR

Fabio Ferraresi is Director, Business Development, South America, at Power Systems Research

Automakers and dealers indicate that a more significant recovery in vehicle demand will depend on a sustained downward trajectory in interest rates, improving affordability for both retail customers and fleet buyers. The current macroeconomic environment continues to constrain replacement cycles, particularly in higher-value segments such as heavy-duty vehicles and agricultural machinery, where financing plays a central role in purchase decisions.

Source: AutoData     Read The Article

PSR Analysis. The initial Selic reduction represents an important directional signal, but its isolated effect is insufficient to materially stimulate vehicle demand in the short term. The current environment suggests gradual recovery rather than an immediate rebound, with investment decisions remaining sensitive to credit availability and expectations regarding future rate trajectory. Sustained monetary easing will be required to support stronger fleet renewal dynamics and improve demand visibility across segments. It reinforces our forecast for the year on the on-road segments.  PSR

Fabio Ferraresi is Director, Business Development, South America, at Power Systems Research